Pushing Boundaries: working on the green flow

The green flow of goods from proven reliable companies has not yet met expectations. This forced Dutch Customs to change its course.

Dutch Customs is a front-runner in many areas. But sometimes the service has to slow its pace under pressure from practical concerns. The green flow of goods, for example, introduced a few years ago, has not yet performed according to expectations. Policy adviser Wim Visscher tells us how this led to a basic change of course within the Pushing Boundaries vision.

 The green stream is for companies with an AEO status, who enjoy compliance-oriented supervision because Customs is satisfied that their internal administrative measures are in proper order. “Nothing has changed with regard to proven reliable companies,” Visscher explains. “The original idea is also still operative, that we wouldn’t release all the risk profiles on goods shipments from such a market party – except, of course, for those required under law. Instead, we carry out so-called validity checks where we sample the logistical stream at fixed times. We look to see whether companies still have things under control, and whether they still meet the standards agreed. So we’re not looking for mistakes, but for confirmation that AEO companies are still doing it right.”

“In addition, our experiences with the Import process – which serve as the basis for this concept – have led to a tighter framework,” the policy adviser continues. “We’ve let go of the one-to-one coupling of the green stream with AEO status holders. These are in fact two separate things. In actuality, the green stream is our national interpretation of supervision, and AEO is a status linked to legal standards and conditions. All customs representatives have to have an AEO-C authorisation or meet the AEO-C standards. That means that all shipping agents have an AEO authorisation. Importers and exporters feel less pressure and also don’t always see the advantages of having it. Unless contractors or clients say: from now on we only want to do business with you if you have an AEO authorisation. Incidentally, this authorisation is a pre-condition for becoming eligible for green stream monitoring.”

One plus one
Earlier studies showed that customs representatives with AEO status don’t do any better in their declaration behaviour than customs representatives without AEO status. “In our opinion, this group should not necessarily in all cases fall into the green stream of goods,” Visscher asserts. “We’re also going one step further in our modified procedure. In addition to the submitter, the legal declarant will also need to have an AEO authorisation. That means in the case of direct representation that both the customs representative as well as the importer or client for whom the declaration is being made have to participate in the AEO programme. We expect that our supervision will pluck the fruits of this alteration. In other words, the more or less 1,600 AEO companies in our client base right now are not per se participants in the green stream.”

From pilot to standing practice
As things stand, the green stream didn’t really take off the way Dutch Customs wanted it to, Visscher admits. “Our service is rich in ideas. But translating them from trials to permanent solutions doesn’t always go smoothly. So, for example, we’ve developed numerous proof of concept models. Here you zoom in on a portion of the goods flow, which means you build-in restrictions for yourself. It’s great when a pilot project is successful, but that doesn’t necessarily mean just because we can do this that it’s a fait accompli. Reality is always so much more complex. For instance, companies are active in multiple areas and not just that specific portion you focused on in your project trials. A successful pilot project in one single portion of the field does not automatically mean that the rest of the goods flow is also A-OK. There’s also a lot of homework involved for the holders of AEO authorisations. When Customs brought the process into operation, we still didn’t have a clear enough picture of the actual importer, which means their role can’t be facilitated.”

The extra service provision previously promised for companies who participate in the green flow has also not become a reality. Visscher: “We really looked hard for ways to broaden our facilitation, but ultimately we kept within the legal AEO frameworks, also to avoid proposing specific future benefits that we wouldn’t be able to back up with deeds. We had also thought of offering companies in the green flow a no-claims benefit/penalty system. That means constantly reducing the pressure of controls for those who keep doing it right. And losing that benefit when validity checks might indicate the opposite. It turned out that our own automation department couldn’t support the pilot projects in this area very well. Therefore we had to put our benefit/penalty system on the back burner.”

Potential candidates
That having been said, the development of the green flow will shortly be getting a robust shot in the arm. Around 250 companies who still use the Automated Periodic Declarations system (GPA) have to change over to the AGS system (which will soon be called DMS) on 1 July 2021 – just like all the other market parties who make customs declarations. Visscher: “These are companies with a heftier kind of authorisation and, with one or two exceptions, AEO status. As far as we’re concerned, they’re all green flow candidates. Our client managers and staff members will be dropping by to tell them what to expect when making the transition to DMS. We’ve made a conscious choice to put the green flow in the spotlight at the same time. There are service providers in this group with very large client packages. But if those clients don’t have an AEO authorisation, in some cases – for example, when that service provider switches to direct representation – they won’t be able to participate in the green flow. We’re hoping that service providers will also motivate their clients to participate in the AEO programme.”

Customs has its work cut out for it, as Visscher says. “Whereas right now about 20% of the declarations submitted to the Import process are potential candidates for the green flow, with the addition of the GPA companies, that will rise to 60%. And if you stop to consider that those 250 parties taken together are good for tens of millions of customs declaration lines, it’s mind-boggling. We try to get companies to relieve the load on our systems by compressing that amount. That won’t be easy because the detailed descriptions in declarations often fit in perfectly with their own workflow and administration. On the other hand, every declaration receives a return message, and that might mean a high workload for companies too.”

In one way or another, efforts will be required from this target group. Visscher: “The quality of the declarations from some of the GPA companies really has to improve. After all, a well-oiled and smooth running customs supervision begins with a high quality declaration.”

Better records wanted
Customs will also have to put its own affairs in order, Visscher concedes. “Fair is fair: customs officers don’t always record the results of their controls in a clear way in our systems. We need more standardisation in this area – also in the interests of speed, since you want to process the findings quickly. People are now aware of this, but making the change takes time. At the same time, this is a pre-condition for a proper set-up of the green flow of goods. We have to set up the process so that, in DMS, staff members can see at a glance which shipments belong to the green flow. We’re also going to monitor participating companies automatically in the background: the ones who drop too many stitches don’t belong in the green flow. And all of this needs speeding up because at the start of next year the first GPA companies can already move over to AGS. But when you’re under time pressure it really sharpens your focus. Nobody can walk away from this one any more.”

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